A credit card issuer is either a bank or credit institution that offers a credit card to the consumer, including a business or individual owner. The card issuer will provide the consumer with the funds for the purchase and use of the credit card. If you look at a credit card, you are likely to see lots of different business names on it, as well as the credit card issuer. Sometimes this issuer will be part of a larger company that offers many different credit cards, while at other times, the issuer will be a smaller company that offers just the one credit card.
Often the major credit card issuer, like Citi, is part of a large retail services organization, like CitiMortgage or Citibank, which also offer commercial mortgage financing and various types of finance programs. In this case, the consumer’s credit card issuer will be the third-party company that acts as a back-up if you do not make your monthly payments on time. Most often, the retail services organization will issue your credit cards. In some cases, however, you may have the ability to purchase them from independent organizations, including banks, brokers, or credit unions.
There are two different types of credit card issuers. There are “brand name” credit cards, which are issued under the logo of one particular credit card issuer. These types of credit cards generally come with the same terms and features that the brand name ones do. They usually do not carry as many added benefits, as the independent or “new and improved” credit cards do.
The second type of credit card issuers are called “non-branded” credit card issuers. These types of credit cards are issued by other credit card issuers that do not have a long-standing relationship with a particular bank or financial institution. Non-branded credit cards often come with different terms than the more popular brand name ones do. The consumer is still obligated to make their monthly payments on time.
A third type of credit card issuers works in conjunction with banks. These third-party providers work on behalf of both the customer (the cardholder) and the credit card issuer (the bank). A good example of this type of third-party provider would be a mortgage lender that allows its customers to pay their mortgage loans through a credit card. Some lenders allow customers to use their credit cards to make “small monthly” purchases, like gas. However, a customer cannot exceed the maximum credit card limit for any single purchase and must repay the entire balance at the end of the billing period.
The fourth type of third-party provider is a credit union. A credit union works under a common carrier system and offers services similar to those offered by major banks. The credit unions generally do not issue credit cards, but they can participate in the same system. Many credit unions allow their members to obtain lines of credit from them and pay their monthly dues and fees to be held in a consolidated account. This helps the credit union by lowering the costs associated with collecting delinquent accounts and ensuring that their members always have access to needed funds.
The last type of provider – the merchant – works directly with a credit card issuer via a merchant account. Merchants can only charge what the consumer swipes out of their card. The credit card issuer then decides whether or not to allow the merchant to add more purchases onto the account. If a credit card issuer does permit a merchant to accept an additional fee, it will be reported to the credit card issuer in the transaction. In years past, some merchants could not swipe a customer’s account for fear of being reported.
Visa and Mastercard are the two leading cards today, and account holders can transfer money between their accounts easily. For international travelers, this is especially important as transferring money can be time consuming and problematic. Mastercard and Visa provide a way for account holders to avoid these hassles and stay in contact with family and friends. They are also very accepted at many locations around the world and have a variety of payment options and promotions. The added value that these cards provide is often beyond what any individual traveler knows. These two companies make paying for tickets, reserving hotels, reserving air flights and driving to and from work much easier than they would ever do without them.